The Indian government decided recently to withdraw 85% of paper currency. Despite the hair-brained nature of this scheme, ostensibly aimed at reducing corruption and tax evasion, the Reserve Bank of India agreed almost overnight. More intriguingly, it seems to be working. Not in the sense of being a beneficial policy. But in encouraging people to deposit the old notes for something that will be worth something after the deadline.
Why is this intriguing?
Well, a contrasting story, told to me first by former Governor of the BoE Mervyn King, is of the late Sadaam Hussein’s attempt to demonetize the then autonomous area governed by the Kurds, and protected by a Western-backed no fly zone.
Sadaam, who was having a spot of difficulty financing his activities through conventional means, needed to print lots of notes, but sanctions prevented him from buying Swiss-printed dinars. So, partly for this reason, and partly to…
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Utopia, you are standing in it! 
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